This paves the way for France to push back the taxes due between March and December 2020 and January 2021. Airlines have been hit hard by the ongoing pandemic and will have an additional 24 months to reimburse part of what is due to State.
“The French regime will partially compensate airlines for damage suffered as a result of the coronavirus. This is the first state aid measure to be notified to us by a Member State in order to mitigate damage to the aviation sector, “said EU chief competition officer Margrethe Vestager .
The Commission’s assessment “concluded that the measure was proportionate because the compensation provided did not exceed what is necessary to repair the damage”, since the virus is now firmly established as a legal “exceptional circumstance”.
But the EU executive has not gone into details on the taxes that will be deferred or the value of the deferred levies. France invoices airlines for a number of taxes, including a new environmental fee on all flights departing from its airports.
Air France CEO Benjamin Smith urged governments in early March to forgo any further levies in the pipeline to help the aviation industry, citing France’s green tax and Dutch plans to deploy one next year.
The Air France-KLM group announced measures to cut costs by more than 200 million euros in mid-March, adding that services would be cut by 90%. The sector could suffer revenue losses of more than 100 billion euros, according to the International Air Transport Association.
US airlines got a reprieve last week when the Senate passed a $ 50 billion aid program, and British carriers are already fixing their stalls for government money .
But consumer groups do not want taxpayers to pay the bill for the big aviation bailout if airlines are not forced to honor their commitments to the EU’s Passenger Reference Bill of Rights.
“Consumers should not be forced to pay twice to support airlines: once as taxpayers funding bailouts, then again being denied the right under EU law to a refund for canceled flights, “said Ursula Pachl of the European Consumers’ Organization (BEUC).
BEUC wrote to EU transport chief Adina Vălean this week, highlighting a number of airline practices which the group said are contrary to the bloc’s rights codex, which the Commission effectively clarified on March 18.
The letter cites examples of airlines offering only vouchers to passengers instead of a full refund, short expiration dates for flight vouchers and confusion about the carrier’s liability for cancellation of multi-stage trips.
[Edited by Benjamin Fox]